Loyalty doesn’t compound. Salary negotiations do.

Written by Natalie Goretski, 28 July 2026

For much of the twentieth century, career loyalty wasn’t simply encouraged — it was built into the financial system itself.

Defined-benefit pension schemes directly rewarded long tenure: the longer an employee stayed, the larger their retirement benefit, typically calculated using years of service and salary history. The employer, not the employee, bore the investment risk. As a result, remaining with one employer was often the financially rational choice.

That landscape has changed considerably. Most workers today participate in defined-contribution retirement plans, where retirement wealth depends primarily on contributions and investment returns rather than years spent with a single employer.

As defined-benefit pensions have been phased out, one of the strongest
financial reasons for long-term employer loyalty has weakened substantially. It has been replaced by a labour market in which changing employers, rather than remaining with one, has become one of the most effective ways to increase earnings.

The economic return to changing employers

Australian payroll data show that workers who change employers receive pay increases approximately 9 percentage points higher, on average, than employees who remain with the same employer (Wong, e61 Institute). Among workers aged 21–34, that difference is worth roughly $7,500 per year. The premium for switching also grew between 2020 and 2022 as labour market conditions normalised after the pandemic.

This pattern isn’t unique to Australia. Research summarised by Glassdoor (Chamberlain, Glassdoor Economic Research) found that employees who change jobs receive an average salary increase of more than 5% at the point of switching, excluding benefits. The same research found that a 10% pay increase meaningfully improves the odds that an employee will stay with their current employer rather than leave. Retention, in other words, increasingly depends on maintaining market-competitive pay rather than assuming loyalty alone will keep people in place.

Interestingly, many of the people responsible for compensation decisions don’t apply the same logic to their own careers. When employees watch executives move to higher-paying opportunities without hesitation, they reasonably conclude the same market forces apply to them. The pattern extends well beyond the executive suite: professional athletes, entertainers, and employees across virtually every industry tend to increase their earning power once they’re free to move to whoever is willing to pay market value for their skills.

Job switching is less common than many assume

The long-term evidence tells a different story from the one usually assumed. Although younger workers continue to change employers more often than older workers, overall job mobility in Australia has declined substantially over the past five decades. The share of employed people changing employer in a given year fell from 17.4% in 1972 down to 9.5% in 2023, and reached a low of 7.7% in 2025 (Australian Bureau of Statistics [ABS], 2025).

The data doesn’t support the idea that workers are switching jobs at unprecedented rates. Younger employees remain more mobile than older ones, as they always have been, but this largely reflects career stage rather than a new behavioural trend. In the year to February 2025, 12% of workers aged 15–24 changed employers, compared with just 1% of workers aged 65 and over (Australian Bureau of Statistics [ABS], 2025).

What’s actually changed is economic, not behavioural. The financial return to switching jobs has risen substantially, while the traditional financial reward for staying with one employer has largely disappeared. Workers aren’t necessarily changing jobs more often than previous generations — when they do move, though, the payoff is considerably larger than it once was.

Side hustles are becoming part of the employment relationship

Alongside these shifts in job mobility, another change has emerged in the labour market. A growing number of full-time employees are generating income through gig platforms, freelance work, consulting, or small businesses — not necessarily as a step toward leaving their primary job, but as a way to strengthen their financial position while staying in full-time work.

Even after cooling from a peak of 50% in 2023, recent Bankrate data shows that nearly a third of millennials continue to maintain a side hustle (Bankrate Side Hustle Survey). This aligns with broader research from McKinsey (American Opportunity Survey), which shows widespread engagement in secondary income activities. Rather than a fringe behaviour, secondary income has become a standard feature of the modern workforce.

A 2025 qualitative study of millennial professionals balancing full-time employment with side businesses reached a notable conclusion: taking on additional income-generating work doesn’t necessarily reduce commitment to a primary employer (Bakhtiar & Molang, 2025). What it changes is the nature of that commitment.

Taken together, these findings suggest loyalty is increasingly viewed as something earned through respect, flexibility, recognition, and reciprocal trust, rather than something automatically owed because an employer provides a paycheck. The study frames this shift through concepts including relational alignment, conditional commitment, reciprocal trust, and identity integration — indicating that employees increasingly evaluate the employment relationship on an ongoing basis, rather than assuming loyalty by default.

This has real implications for how the employment relationship itself is understood. A full-time employee who also freelances, consults, or runs a small business has an additional income source, an independent benchmark for their own market value, and more flexibility to respond if their primary employer no longer offers competitive pay or opportunities. These alternative income streams reduce dependence on a single employer and change how employees weigh career decisions.

What actually drives employee turnover

A 2024 quantitative study of millennial employees in multinational corporations found that employee empowerment — the degree of autonomy and influence employees have over their own work — was the strongest predictor of turnover intention (Tan et al., 2024). Work-life balance ranked second, and reward systems, including compensation, ranked third. Together, these three factors explained more than half the variation in employees’ intentions to leave.

The ordering is worth noting. Pay still matters, but it’s only one part of the decision to leave. Turnover appears to reflect a widening gap between what organisations offer and what employees now expect regarding autonomy, flexibility, recognition, and fair compensation.

The economics of loyalty have changed

The traditional advice to stay loyal to one employer has become far less persuasive in today’s labour market. It reflected an era in which defined-benefit pensions rewarded long tenure and switching employers carried real financial risk. For most workers, neither of those conditions still holds.

The evidence here points to a labour market where changing employers frequently delivers stronger wage growth than staying put. At the same time, long-term job mobility has fallen rather than risen, suggesting people aren’t switching jobs more often than earlier generations — the financial incentives around the decision have simply shifted. The traditional rewards for long-term loyalty have weakened, while the payoff for changing employers has grown.

The nature of work itself has shifted alongside this. A growing share of employees now supplement their primary income through freelancing, consulting, or other side work, while research shows autonomy, work-life balance, and recognition matter at least as much as pay in shaping whether someone stays or leaves. Loyalty is increasingly reciprocal and conditional, rather than automatic.

None of this means loyalty has lost its value, or that changing jobs is always the smarter move. Long-term employment can still offer professional development, strong workplace relationships, institutional knowledge, and career progression. But loyalty is no longer rewarded simply by the structure of the labour market itself. Employees are increasingly weighing whether staying still makes financial and professional sense, while organisations hoping to retain talent need to offer competitive pay alongside real opportunities for growth, flexibility, and recognition.

n today’s labour market, loyalty looks less like an obligation and more like the outcome of a relationship that keeps delivering value to both sides.

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Natalie Goretski is the founder of iViser Academy, an online financial education platform helping high-income professionals build structured, AI-powered financial systems.

Sources:

e61 Institute, “Climbing the wage ladder: Linking job mobility and wages” (2024), based on ATO Single Touch Payroll data https://e61.in/climbing-the-wage-ladder-linking-job-mobility-and-wages/

Australian Bureau of Statistics. (2025). Job mobility. ABS. https://www.abs.gov.au/statistics/labour/jobs/job-mobility

Tan, S. J., Wider, W., Jiang, L., Udang, L. N., Sam, T. H., & Tanucan, J. C. M. (2024). Factors influencing millennial employees’ turnover intention in multinational corporations in Penang, Malaysia. Journal of Infrastructure, Policy and Development, 8(7), Article 3922. https://doi.org/10.24294/jipd.v8i7.3922

McKinsey & Company. (2022, August 23). Freelance, side hustles, and gigs: Many more Americans have become independent workers. McKinsey’s American Opportunity Survey. https://www.mckinsey.com/featured-insights/sustainable-inclusive-growth/future-of-america/freelance-side-hustles-and-gigs-many-more-americans-have-become-independent-workers

Wong, A. (2024, February 15). Climbing the wage ladder: Linking job mobility and wages (e61 Research Note №11). e61 Institute. https://e61.in/climbing-the-wage-ladder-linking-job-mobility-and-wages/

Bakhtiar & Molang, “The Meaning of Employee Loyalty Among Millennials in the Age of Gig Economy and Side Hustles,” Golden Ratio of Human Resource Management, Vol. 5, Issue 2 (2025) https://www.goldenratio.id/index.php/grhrm/article/view/1607/1012

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